UAE is currently witnessing transformations in fields related to sport and entertainment activities. In the recent past UAE have successfully hosted major sports event e.g. Abu Dhabi Formula 1, Dubai Air Show, Dubai desert challenge to name a few and will soon be hosting other major sport event likes Gulf Bike Week, Dubai Motor Festival, Dubai Rugby Sevens, Mubadala World Tennis Championship etc. These events provide opportunities to witness the biggest talents and earn great revenues but at the same time the risks associated with organizing such events give sleepless nights to investors. This article will highlight the types of major risks associated with organizing sports event and the ways to manage them.
Authorities in UAE have predefined criteria for allowing events to ensure safety and security for players, participants, audience and staff at such event. Organizers are required to obtain NoC from competent authority for organizing such events.
In addition to that the organizers should include a comprehensive risk identification system and to take adequate insurance cover to manage risks associated with such events.
Types of Risk
Following are the major types of risks associated with major sports event:
Security of participants and audience: These are risk associated with any unforeseen event that may result in physical hazard to any of audience and participants.
Damage of Property: Risk associated with damage of assets and property due to any unforeseen event during the event.
Low Turnout Risk: Generally huge investments are involved in organizing these events. There is always risk of loss in case of low turnout of audience.
Cancellation Risk: This is the risk associated with cancellation or postponement of event due to some uncontrollable incident.
Risk Management
Generally in big events the risk is shared by many parties like event right holders, venues, organizers, broadcasters and third party contractors and risk component is mitigated and allocated at the initial stages of organizing the event. It is advisable to adequate insurance cover along with fulfilling the basic safety and security requirement of competent authorities.
In addition to that, the organizers may also make it a part of contractual agreement for audience that organizers cannot be held liable for any loss or injury to them during event. However, it is important to note that this waiver of liability clause will save the organizers only if they have took reasonable precautions against such risk of loss or injury and such loss is caused out of the event.
Here we can say that the organizers are not free from their responsibility for ensuring safety and taking reasonable precautions against risk and at the same time audience should be bind by waiver of liability clause if they do not follow the safety conditions or choose to take an activity after getting a disclaimer of risk associated with it.
Third Party Risk
This risk is associated with loss and injuries to third parties. Organizers are generally advised to take third party liability insurance to save themselves against any liability for loss or injury to third parties that arises out of premises of event. With the growth and diversification of sport events in UAE it is becoming a general practice to take TPL.
The Bottom Line
To conclude we can say that risk is always associated and it is an indispensable part of any event. Managing risk reduce the loss or damages that may have to be suffered by organizers but it cannot guarantee full protection. The organizers should take effective steps in initial stages to identify and mitigate all types of risks associated with an event and shall take necessary steps to reduce it. It will not only facilitate to finalize the cost and revenue model but also be helpful in protecting organizers from huge financial losses that may impact their business for a longer period of time.
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